On September 29, 1999, the Honorable James Lawrence King, United States District Judge for the Southern District of Florida, entered a permanent injunction by default against defendant Titan Petroleum Corp. ("Titan"). The order permanently enjoins Titan from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, sets disgorgement as to Titan at $759,533, representing its ill-gotten gains plus prejudgment interest, and sets civil penalties as to Titan at $550,000.

The Commission's complaint, filed on May 19, 1998, and amended on June 7, 1998, alleged that from April 2, 1997 through September 24, 1997, Titan and its principals, Natale L. Montozzi and Philip Leitner, fraudulently raised at least $654,770 by selling undivided, fractional working interests in three separate oil and gas well drilling programs to sixty-five investors. The complaint alleged, among other things, that the Titan offering documents represented that the amount of each investment was to cover all costs for drilling and completing the particular well in which it was invested, that Titan failed to disclose to investors that the amount of money raised in each case was far in excess of the costs it knew it would incur to drill and complete the well for which the funds were raised, that investor funds were commingled and used to pay a wide variety of expenses not provided for in the offering documents, including, large undisclosed payments to related parties, that two of the wells were drilled in locations different than those described in the offering documents, and that the offering documents and telephone script contained false or misleading statements concerning the success, experience and history of the company.